From Home Furnishing Business
Editor’s Note: What You Give Can You Take Away?
by Bob George,
The past year has created a “heady” atmosphere with increasing sales (21.8%) and increasing profits (13.2%) for traditional retailers. However, along with this time of plenty came increasing product and transportation costs if and when product could be found. Continued employee turnover resulted in management and owners using long forgotten muscles because that truck needs to be unloaded or that delivery had to be made.
Retail sales associates needed to sell from a depleted selection and resell again and again as promised delivery dates move out. Under the stress of managing in a totally different environment, the temptation is to throw money at the problem without questioning which of these categories has been impacted by the increased sales. The answer is none. While the revenue has increased, the units warehoused/delivered have declined. While the revenue has increased, the number of orders/customer sold has remained the same – only the average ticket has increased. And yes the frustration has increased.
The graphic below compares the expenditures for labor from the top quartile of traditional retailers as they move through the pandemic. While sales have increased 19.4% from Q4/20 to Q4/21 and salaries and wages have decreased (-4.1%), should it be less if consumer demand/prices return to normal? I know it is like waiting for the hurricane on the beach. All the warnings, but the sky is beautiful. However, you coped with a pandemic, you will handle what happens.